Kazakhstan will claim "several hundred million dollars" in taxes from KPO

The Tax Commission of Kazakhstan Ministry of Finance completed a tax inspection of Karachaganak Petroleum Operating (KPO is developing Karachaganak field), Interfax-Kazakhstan reports citing a source in Kazakhstan government. “The inspection is over. Next week or in the end of this week the report will be submitted (to the Government)”, he said. The source noted that “the check was positive for Kazakhstan”. Answering the question about the amount of the tax claim, he said: “Several hundred million dollars”. The tax inspection in KPO covered timeliness of payment of taxes and other compulsory payments to Kazakhstan budget in the period from 2005 to 2009. Kazakhstan wishes to obtain a share inthe consortium and KazMunaiGas National Oil Company has sent KPO an offer to buy a 10% stake. The negotiations between Kazakhstan and KPO on the state's entering the development project of Karachaganak oil and gas field will be completed by the end of this year, Oil and Gas Vice-Minister Lyazzat Kiinov said earlier. In the middle of June the source close to the situation stated that the Kazakhstan government and participants of KPO consortium reached a preliminary agreement for Kazakhstan to purchase 10% in Karachaganak project. KPO shareholders agreed for a 10% participation of the state: 5% for free and 5% at the marker price. Karachaganak Petroleum Operating (KPO) is a consortium of companies to develop Karachaganak oilfiled. The consortium includes BG Group, Eni (32.5% each), Chevron (20%) and LUKOIL (15%). KPO operates in accordance with a PSA signed with the Kazakh Government in November 1997. According to the PSA, the consortium shall be operating the project until 2038.